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At 12:28 PM -0400 5/15/98, Steven C. Walker wrote:
>"It is important to know what technical analysis can and cannot do. A
>good start is to accept the fact that something like eight of ten stock
>charts have nothing to say. Many technicians go wrong by thinking they
>can find the basis for an intelligent technical opinion in any chart if
>they are astute enough to ferret it out. Not true. A typical chart is
>like a Sphinx - silent and mysterious. It can only show you the results
>of the struggle between the bulls and bears. In some cases it offers
>clues as to who are the smartest . In most cases it cannot. The trick is
>to devote your energy to those charts that are actually betraying
>something about the opinions of, for want of a better phrase, somebody in
>the know."
I would say it is a matter of degree. With stocks there are thousands of
candidates so it makes sense to select the charts that are screaming
something at you. Your system needs to be pretty general as you cannot
optimize it for a single stock.
If you trade futures, there are still quite a few possibilities but there
is more of a need to get as much as you can from each market and optimize
for at least groups of markets.
But if you only trade a single market, such as the S&P or TBonds, you
obviously need to get as much out of it, and understand it extremely well.
What is "silent and mysterious" to one person may be an open book to
another with more experience with that market.
Bob Fulks
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